Hobby>Life?

[SupremeGOAT]

How much do you owe on your credit card? I owe $497 for that GPU i got recently... im curious if i'm the only one in financial ruin

[Anghammarad]

If it is not needed, never buy with debt/credit. 

 

Put money on the side and buy then. Yes that means perhaps waiting a little... but hey we got a brain and can use it to forsee things in the not too far future... like wanting a new gfx card... so we can put money aside...

 

Yes I would love to have a new machine at the ready. But if I don't have the funds and can only afford one piece a month, then I shop one part per month, and then soon have the new system.

[dalekphalm]

5 minutes ago, Anghammarad said:

If it is not needed, never buy with debt/credit. 

 

Put money on the side and buy then. Yes that means perhaps waiting a little... but hey we got a brain and can use it to forsee things in the not too far future... like wanting a new gfx card... so we can put money aside...

 

Yes I would love to have a new machine at the ready. But if I don't have the funds and can only afford one piece a month, then I shop one part per month, and then soon have the new system.

Excellent idea - unfortunately not everyone has been taught smart financial spending. Furthermore, credit card debt is sometimes unavoidable.

 

But yes, it's ideal not to buy stuff like a GPU on credit unless you have the cash to pay for it immediately.

[Volbet]

I owe nothing on my credit card or in general consumer loans. 

The only debt I have is in the house I iive in and that's more than enough for my liking.

Even my motorcycle was bought cash to avoid further debt. 

 

Buying anything on credit (unless it's for improving your credit score) just seems like a bad idea. 

It could easily start a spiral of debt which only grows larger and larger.  

[Drak3]

$6,000. Of which, all will be paid back in a year with most of it being under special financing that lasts me 2 years. It I really wanted or needed to, I could have it paid off in December.

[Guest]

University is what’s causing me troubles with the costs. I really hope that my job after will get me plenty of money to pay it off easily. Then I’m moving to a country where University isn’t such a cash sink for my kids and grandkids sake. 

[aezakmi]

$0 because I don't have one

 

win/win

[PlayStation 2]

How the hell are you going to use credit for a damn GPU? That's just irresponsible spending.

[Drak3]

19 minutes ago, Dan Castellaneta said:

How the hell are you going to use credit for a damn GPU? That's just irresponsible spending.

Depends on how you go about it.

[QuantumBit]

5 hours ago, Drak3 said:

$6,000. Of which, all will be paid back in a year with most of it being under special financing that lasts me 2 years. It I really wanted or needed to, I could have it paid off in December.

Why didnt you pay it off earlier?
 

[Drak3]

1 minute ago, QuantumBit said:

Why didnt you pay it off earlier?
 

Build credit. It goes up every 2 to 3 months, and my credit line increases by $3,000, which doesn't quite happen paying it off ultra fast.

[QuantumBit]

23 minutes ago, Drak3 said:

Build credit. It goes up every 2 to 3 months, and my credit line increases by $3,000, which doesn't quite happen paying it off ultra fast.

I thought credit score went up when you paid in time

[dalekphalm]

16 minutes ago, QuantumBit said:

I thought credit score went up when you paid in time

It does. But there are a lot of nuances to it. 

 

For example, the credit company measures your credit card once per month, typically when your bill is generated. 

 

One of the things they measure is credit balance. Having zero balance is worse for your credit than having a 10% limit balance. 

 

So this means if you pay off your credit card immediately after each purchase, it’s actually not great for your credit, because your balance will always show zero.

 

But if you instead pay your bill in full each month, that’s better for your credit. 

 

However, keeping a balance that isn’t paid off right away - while still good for your credit (assuming regular payments and a slowly lowering balance) - is not as good as paying it off in full. 

[QuantumBit]

35 minutes ago, dalekphalm said:

It does. But there are a lot of nuances to it. 

 

For example, the credit company measures your credit card once per month, typically when your bill is generated. 

 

One of the things they measure is credit balance. Having zero balance is worse for your credit than having a 10% limit balance. 

 

So this means if you pay off your credit card immediately after each purchase, it’s actually not great for your credit, because your balance will always show zero.

 

But if you instead pay your bill in full each month, that’s better for your credit. 

 

However, keeping a balance that isn’t paid off right away - while still good for your credit (assuming regular payments and a slowly lowering balance) - is not as good as paying it off in full. 

Thank you, didn't know there were so many other things that had to be considered.

[dalekphalm]

30 minutes ago, QuantumBit said:

Thank you, didn't know there were so many other things that had to be considered.

There shouldn’t be, but hey - credit agencies like things complicated ?

[mr moose]

I have no credit card.  If I can't afford it and I don't need it, I don't get.

8 hours ago, Volbet said:

I owe nothing on my credit card or in general consumer loans. 

The only debt I have is in the house I iive in and that's more than enough for my liking.

Even my motorcycle was bought cash to avoid further debt. 

 

Buying anything on credit (unless it's for improving your credit score) just seems like a bad idea. 

It could easily start a spiral of debt which onlyu grows larger and larger.  

 

My moto (which has served me well) is that credit is for the things you must have but can't afford upfront.  My grandfathers saying was: "credit is a single product you pay for twice". Which I really like.

[TacoSenpai]

Just a bit in gas money.  The only reason I really got a credit card to be honest.  My debit card got compromised once at a gas pump and while I didn't lose money it did mean that I had to wait a week to get a new one sent by the bank. That being said I just use my credit card on gas so if it something happens its not my checking account getting messed up.

 

But yes general rule of thumb don't max out that credit limit and pay it off before the end of the month. 

[DimasRMDO]

Credit card is like a person who has a smile of a shark.

It really makes you happy and want to spend more and more but then it tries to kill you in the end.

 

I've got no debt.

I just use my debit card, or I just take some money from the ATM machine just so I can be more responsible with my spending.

Unless it's not urgent/important, I don't use my credit card.

When I want to buy something I'll just try to save my money for it.

[Dredgy]

I have about $130000 currently on my credit card.

 

15 hours ago, Anghammarad said:

If it is not needed, never buy with debt/credit. 

Not great advice. NEVER spend money you DON'T have with credit - but if you DO have the money, then credit cards can definitely work in your favour. Remember, debt does not necessarily mean money you don't have, it's just a tool that can have a wide variety of applications. I use it for cashflow management primarily.

 

For instance, my major hobby is travel - I want to visit every country in the world. My credit cards earn between 1-2 Frequent flyer points per dollar spent (plus plenty of ways to double dip), so I earn roughly 2 million points on a million per year of expense (business expenses I would put on my card anyway, but even if with a more normal amount, the rewards can be immense).

 

Basically I fly for free in business or first class, plus my card gives me status with several major airlines so even if I'm booked on a cash economy class ticket I get all the luxuries such as lounge access. On top of that my credit cards include my home, travel, life & purchase insurance, access to discounts at many stores, a free bottle of wine at my favourite restaurants etc. I could also use the reward points to get myself a gaming PC every 6 months or so if I so desired, and I know plenty of people on much smaller incomes than me that can profit on a credit card. Last year I think I got about $40k of value on about $5000 in annual fees.

 

Which brings me to the second point - credit card or not, you should absolutely leverage debt to your best ability. A great example is last year I bought a car. As most people will know, cars depreciate in value very quickly. I could have purchased the car outright with cash, but why would I want to tie up my money in an asset that's going to lose value? So I financed it at 5% interest using the bank's money, they own the depreciating asset, not me . That meant my cash was freed up to invest in something that was going to grow my wealth and not sit there haemorrhaging value, the fund that I did invest in saw a return of (admittedly, quite luckily) nearly 20% (I was aiming for 7.5%). So my car, instead of costing me a healthy chunk of my bank account, ended up being completely cost neutral (and indeed, allowed me to be profitable, the returns covered the depreciation, the interest, registration, insurance & even the petrol).

 

Debt is not bad, and has the potential to be incredibly good. But of course potential is easily squandered if you have no discipline or forethought.

 

(EDIT2: Also, I learned this lesson the hard way. Before I learnt financial management, I had bad credit card debt that I did default on so that I was able to use all my resources to start my first business)